THE average price of a house in the UK has hit £250,000 for the first time, as the rise in property values sweeps the country.

While London homes are still increasing at more than double the UK average, there is also strong growth in the East of England, West Midlands and North West.

The Office for National Statistics (ONS), which released the figures this morning, said UK house prices increased by 5.5 per cent in December 2013 compared with a year earlier.

London saw a 12.3 per cent increase over the same period, pushing prices to an average of £450,000 - which is one fifth higher than their pre-financial crisis peak in the capital in 2008.

The figures come as inflation fell below the Bank of England's two per cent target for the first time since November 2009.

The Consumer Prices Index (CPI) fell for the seventh month in a row in January, to 1.9 per cent from two per cent in December, according to the ONS.

Low inflation will ease pressure on the Bank of England to increase interest rates - good news for mortgage holders but will not be welcomed by savers.

Housing Minister Kris Hopkins welcomed the property price figures.

He said: "These figures show that the housing market is in robust health, thanks to the Government's actions taken to keep interest rates down and our initiatives to help people get onto the housing ladder through schemes like Help to Buy and Right to Buy.

"We have kick-started house-building, with registrations of new-build homes the highest in London since records began 26 years ago, and the highest for seven years across England as a whole.

"Our affordable housing programme is investing almost £20 billion in homes for those on lower incomes too, to ensure all hard-working people benefit from the economic recovery."

First time buyers are paying 7.4 per cent more for a home than they were a year ago.

In December, the typical price paid by someone getting on the property ladder was £189,000.

Average house prices across the country include:

North East - £147,000

North West - £168,000

East Midlands - £176,000

West Midlands - 190,000

East - £263,000

South East - £306,000

South West - £232,000

Homeless charity Shelter is calling for an increase in house building [PA]

Until we build enough homes to keep house prices stable, more young people and families desperate to put down roots will see a home of their own become a distant dream.

Campbell Robb, Shelter's chief executive

The Government's flagship Help to Buy scheme, which was launched last year, has significantly widened the availability of mortgages for people with deposits as low as five per cent.

More loans were handed out to first-time buyers in 2013 than in any other year since the economic downturn.

But some experts argue that, while the scheme has helped to boost the supply of potential home-buyers, more should be done to increase the supply of properties on the market, which could help to calm house prices in some areas.

Homeless charity Shelter warned house prices are "spiralling out of control".

Campbell Robb, Shelter's chief executive, said: "Yet again, the Government's own figures show that house prices are still spiralling out of control.

"Until we build enough homes to keep house prices stable, more young people and families desperate to put down roots will see a home of their own become a distant dream.

"Schemes like Help to Buy are only making the problem worse by inflating house prices further. To give the next generation a fighting chance, the Government needs to get serious about building more affordable homes now."

The low inflation figure was welcomed by Prime Minister David Cameron, who said in a message on Twitter: "Today's fall in inflation is more evidence our long-term economic plan is working. We want to ensure a secure future for hard-working people."

Britain's largest union, Unite, also welcomed the inflation drop, but general secretary Len McCluskey reiterated his call for a rise in the minimum wage.

He said: "The plain fact is that millions of people in the UK are struggling to make ends meet because of the escalating cost of living crisis.

“Wage costs are being held down by employers who are imposing pay freezes and pay cuts, using zero hours contracts and relying on part-time workers who want full-time jobs.

He added: “The latest figures reveal that average wages are bumping along the bottom at 0.9 per cent, which is half the rate of the CPI index.

“The dip in inflation is to be welcomed, but the other side of the equation is the need for an urgent boost to pay packets.”

Professor Philip Booth, of the Institute of Economic Affairs, also welcomed the fall in inflation, but did sound a note of caution.

He said: “The fall in inflation is good news. However, we should bear in mind that it is four years since inflation was last below the Bank of England’s target and yet the Bank should undershoot its target roughly as often as it overshoots its target.

"Unfortunately, recent announcements suggest that controlling inflation is not the top priority it should be for the Governor.”